Ally Financial in Detroit plans to redeem about $1.3 billion of preferred stock, opening the door to a possible stock buyback next year.

The $156 billion-asset company received approval from the Federal Reserve to redeem 1.3 million shares of fixed-rate cumulative perpetual preferred stock. Ally will redeem the shares at $1,000 each, plus accrued dividends and fees, bringing the final price to $1,005.64 per share. Ally plans to complete the redemption on Dec. 14.

The preferred stock has accrued a 7% yearly dividend, terms that were set during the financial crisis. Removing that burden may lead to a share-repurchase program next year, Chief Executive Jeffrey Brown said in a Friday news release.

"Addressing this remaining legacy security will remove the restriction the company had on offering common equity distributions and position Ally to meet its objective of initiating a dividend and share repurchase program in 2016," Brown said.

Ally initially issued about $2.6 billion of preferred stock in this series. In April, Ally redeemed about half of the preferred shares.